E-audit: tools evolving to help you find your way along the paperless audit trail.

• Author: Davis, Tom C.

Accounting firms have improved audit efficiencies by using electronic audit tools for more than two decades, starting with trial balance software in the early 1980s. The software has evolved to include electronic audit programs and engagement management and paperless tools.

Here is a narrow look at some of the important aspects of getting the most efficiency from electronic audit tools.

AUDIT SOFTWARE

The first decision firms must make is which type of workpaper software they will use. Basically, there are two types: trial balance applications and workpaper tools. Both include trial balance features that group and adjust a client's account balances to prepare financial statements, business tax returns and other reports.

Firms using trial balance software should be making the move to workpaper tools, which start with trial balance features and add capabilities for indexing other documents, such as Word and Excel files and scanned documents, to create an electronic equivalent of a firm's traditional paper workpaper files and binders.

Workpaper applications also provide features for managing workpaper information, such as responsibility, status and target completion dates, and integrating them with other applications such as word processors, spreadsheets, tax, document management, and time and billing applications. CCH, Creative Solutions, Caseware, and PPC are the main vendors for this type of audit software.

For the most efficiency from audit software, firms should focus on standardizing processes.

First, spend time developing the organization structure, processes for setting up information and review procedures. Then, train firm members and enforce compliance with the firm's standards. While it may be necessary to have different standards for different types of audits, standardization will reduce the effort it takes to get new users up to speed; provide more uniform work-papers from job to job; and reduce the amount of preparer and high-cost reviewer resources used on the audit.

Electronic checklists and decision support tools are also valuable for auditors. PPC, McGladrey, Aspen Publishing are among the vendors offering a wide range of electronic publications, checklists, audit programs and other publications in both CD and internet versions.

The workpaper software programs integrate to varying degrees with these tools to provide a suite of audit software. It is important to have these tools available to the staff in the field.

Many firms...